Business Conditions Remain Steady for Mold Industry

The results of the American Mold Builders Association (AMBA) Fall Business Forecast Survey show that business conditions remain steady for the mold manufacturing industry. Current business conditions remain Good – Excellent for 78 percent of the respondents, the same as the Summer 2011 survey.

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Projections of their company’s business conditions over the next quarter have the majority of respondents at 82 percent optimistic, expecting business to either remain the same (52 percent) or increase moderately (30 percent). None of the respondents to the Fall survey are currently seeing Bad business conditions, nor do any of them see any substantial decrease in business over the fourth quarter of 2011.

Most of the business activities also held constant from the Summer survey, quoting the Same for 53 percent of the respondents, and up for 27 percent. Shipments of completed molds are up or the same for 92 percent of the respondents. Backlog is up for 40 percent of the respondents and the same for 42 percent, which continues to support a good book of business for companies responding to the AMBA Fall survey.

“Quoting is still good,” commented one respondent, “but pricing remains competitive - still no good profit margins.”

Despite that comment, profits continue to hold up, with 84 percent of the respondents saying that profits are up or the same in the third quarter as the second quarter. Employment among respondents’ shops saw a nice bump upwards with 38 percent reporting an increase in the number of employees in the third quarter compared to only a 2 percent increase in the Summer survey. 55 percent reported that employment levels remained the same. Only 7 percent of the respondents reported that employment at their shops had decreased compared to 28 percent in the Summer survey, so it appears with increased workloads, employment levels also are taking a good jump.

But, the mold manufacturing industry still needs good, skilled workers. “We currently see a need to attract young people into this trade,” commented one respondent.

Work week hours held steady from the Summer survey at 49 hours for shop employees and 48 for design and engineering employees in the Fall survey. With shop employment showing such an increase in many of the respondents’ companies, the average number of shop employees increased substantially, up to 25 from 22 in the Summer survey. Design and engineering employees were down by one in the Summer survey to an average of four, and up by two to an average of six in the Fall survey, which reveals a good bit of hiring during the past quarter.

The survey included questions about companies that export molds, and the Fall survey revealed that almost half of the respondents export molds to other countries (42 percent). Of those who export molds, 69 percent export them directly from their facilities, while the remainder of the respondents send the molds to their US-based OEM and let it handle the exporting to its foreign facilities.

Of those who export molds, 71 percent export 1-5 molds annually; 16 percent export 6-10 molds and 13 percent export more than 10 molds. This would indicate that building molds bound for molding facilities in foreign countries represents a fair amount of business for those 42 percent who export finished molds.  

The majority (58 percent) of the respondents who do not engage in exporting activity, say that it is either too much trouble to export (10 percent) or that their OEM customers export the molds. Comments on why US moldmakers don’t engage in exporting more of their molds range from “no current need as we have ample local business” to “no opportunity to do so.”

Some just feel they lack the knowledge. “We’re not educated on how to export and find customers outside the US,” commented one respondent. Another noted, “I am interested but it seems like a mountain that requires more time than I have.”

Another respondent who exports molds commented, “Exporting is a total nightmare, but we have to do it.”

 

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